Syngenta Has a Bright Future in India

Japanese Like To Eat Their Own Rice

Tegra Aims to Increase Yield of Crops

Tegra Aims to Increase Yield of Crops
Tegra Aims to Increase Yield of Crops | Source

Paying Attention to Emerging Markets


Syngenta Aims At Integration

Syngenta International is a global leader in crop protection. It is a $11.5 billion firm. The company was restructuring its operations last year with an aim to integrate seeds business with crop protection. This strategic plan was to be completed, as per the plan, by the end of the current year 2012. This will assist in the development of the farmer and will also result in greater food security which will be beneficial to the society as a whole. This can be done only through innovation. The company has coined three slogans for achieving its aim: Integrate Innovate and Outperform. The policy seeks to deliver superior shareholder and customer values. Commercial integration of seed business and crop protection will result in cost saving of a whopping $150 million at the global level by the year 2015.

Paying Attention to Emerging Markets

Biotic stress will be addressed through generation of combined chemical and genetic solutions. An expanded crop-based pipeline will be developed by the company through its R&D. Emerging markets account for nearly half of the sales turnover of Syngenta now. Syngenta is focusing its attention on the emerging markets to further develop this share. In emerging markets, the farmers continuously invested to improve the yields. Syngenta found that the demand was sustained throughout 2010 and 2011 in the Asia Pacific region. Syngenta is depending on dietary changes and population growth in the region for its growth.

Integration of Biology and Chemistry

As part of is focus on emerging markets, Syngenta is attaching great importance to India. Syngenta is a Swiss-based company. Mike Mack is the CEO of the agro-firm Syngenta. The company’s plans for integrating seed business and crop protection is nothing but an integration of biology and chemistry. Mathematics and Physics have so much in common. Physics and Chemistry have also many common things. But Biology and Chemistry are almost identical twins. Their integration in any area of operation is quite an achievable thing. Syngenta has already tasted success in such integration in Italy and Brazil. Akshaya Kamath is the Managing Director of Syngenta India.

Competition Is Immense

Syngenta has competition in India from other multinational companies like Bayer CropScience and Mosanto. Besides, Indian companies like United Phosphorus are also in the field. Mosanto India Ltd says that its aim is to make the farmers to produce more with less (inputs and cost). Mosanto is focusing on integration of seeds and crop protection in crops like canola, soya bean, corn and cotton. Mosanto plans to achieve this through higher yielding seeds that can offer herbicide tolerance, insect protection etc through biotechnological methods. Mosanto is better placed than Syngenta in India as it had been operating in India since 1949 and knows the pulse of Indian farmers. The Indian company United Phosphorus is a Rs.7000 crore company and has shifted from agrochemicals to seeds business. Bayer CropScience is focusing on rice for its operations in India. Rice provides more than 60% of calories needed for everyday for more than two billion people everyday. 90% of world’s rice is grown in Asia. Average per capita consumption of rice is more than a kg a week. Therefore it makes sense for Bayer CropScience to concentrate on rice.

Tegra Aims to Increase Yield of Crops

Syngenta has launched its Tegra in India. What is Tegra? Tegra advocates planting high quality seeds which had been subjected to chemical coating already. It also advocates mechanical transplanting of seeds instead of manual operations. Labour input is saved because of this. Tegra has increased the yield of crop by 30% on an average. Paddy seedlings are cultivated in a special media consisting of soil, straw, chemicals and nutrients in a tray. After developing them in a nursery, the seedlings are replanted after a gap of fifteen days through a special transplant machine. Syngenta has obtained a patent right for the media it uses for cultivation. After transplantation, the seedlings grow. An acre of land requires seventy such trays and each tray costs the farmer Rs.75 ($1.5). Syngenta provides assistance and counselling to the farmers till harvest is over. One of the farmers in Tamil Nadu who used Tegra testifies that his yield on the crop had increased from 2.4 tonnes per acre to 3.3 tonnes per acre. Tegra technology is slowly becoming popular in South India particularly in Andhra Pradesh and Tamil Nadu.

Japanese Like To Eat Their Own Rice

Japanese Like To Eat Their Own Rice
Japanese Like To Eat Their Own Rice | Source

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Syngenta Has a Bright Future in India


Japanese Like To Eat Their Own Rice

Worldwide, Japan uses Tegra technology and has benefitted out of it. The main diet for Japanese is rice. Japanese hate to eat imported rice and want to eat rice cultivated in their own country. Some other countries where Tegra is used successfully include Taiwan, South Korea, China and Thailand. Rice is a water-intensive crop and Tegra reduces water consumption to an appreciable extent. Besides rice, Syngenta is focusing on crops like wheat, sunflower, soya, fruits and vegetables in India.

A Company Should Not Rest On Its Laurels

Syngenta is just a twelve years old company. It was started in the year 2000. When Astra Zeneca and Novartis merged their agro business, it resulted in the formation of a new company called Syngenta. Can this relatively new company Syngenta compete with much older and experienced companies like United Phosphorus, Bayer and Mosanto? It is quite possible to do it. Technology and managerial skills are the key to growth. Shalimar Paints, which was started in the year 1902 in British India, grew as the number one paint company in India. But relatively new players like Asian Paints have overtaken it. Shalimar Paints reports a sales turnover of Rs.400 crore whereas Asian Paints reports a figure of Rs.6000 crore. Therefore it is possible for Syngenta to overtake the other players and become number one in the world. Already it has achieved that distinction. Now the task is to maintain that position and to grow further without allowing any complacence. Once a company has come to the top of the world, it tends to rest on its laurel and allows competition to overtake it. This should not happen to Syngenta.

Agro Business Is Worth $60 Billion

Internationally, the agro business is worth $60 billion. Out of this, crop protection products represent $35 billion. The remaining is covered by biotech & conventional seeds and professional products. Syngenta is a global leader in crop protection. In commercial seeds, Syngenta is third. Syngenta also offers services in the areas of gardens, lawns and public health. Syngenta operates successfully in North America (NAFTA), Europe, Africa and Middle East. In Asia, it is growing. Brazil is the world’s largest domestic agricultural market. Syngenta is gaining foothold there. Out of the emerging markets, Syngenta is focusing on Latin America apart from Asia Pacific. Syngenta has an R&D facility in Goa in India. Syngenta has a seeds storage facility in Ranebennur in Karnataka where it is expanding its capacity.

Sales Increases but Net Profit Declines

For the financial year ended 31.03.11, Syngenta India reported a sales figure of Rs.2076 crore which was 17% higher than the previous year’s figures. Crop protection business reported a growth of 19% whereas seed business grew by only 7%. Syngenta’s plant in Santa Monica in India is the international sourcing hub for the company’s markets in Europe, USA, Latin America and South East Asia. But Syngenta India reported a reduced net profit of Rs.151.65 crore from Rs.178.53 crore. India stands in the fourth place in the production of agro chemicals in the world next to USA, Japan and China. But Indian agro chemical consumption is not at par with its production. Per hectare consumption of agro chemicals in India is just around 0.6 kg whereas in Japan it is 11 kg and in USA it is 4.5 kg. In India, agro chemicals are produced mainly for exports and not for internal consumption.

Syngenta Has a Bright Future in India

India is the second most populous nation in the world next to China. Arable land is diminishing in India day by day. Population is increasing. Every year India produces the population of Australia. India has to feed this growing population amounting to more than one billion. Therefore improved technology in cultivation, crop protection, high yielding seeds and improved biotechnology to tackle pests and insects are a must to feed Indian population. Companies like Syngenta offer these facilities and have a bright future in India.

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